CAMAC Energy Inc. a US-based energy company engaged in the development and production of oil and gas in West Africa and China, announced today that it has entered into a binding Heads of Agreement with Allied Energy Resources Nigeria Limited and certain of its affiliates, to acquire all of Allied's remaining interest in a Production Sharing Contract which relates to those certain oil mining leases 120 and 121, granted to Allied by the Federal Republic of Nigeria with respect to oil and gas assets offshore of Nigeria.
The company previously acquired all of Allied's interest with respect to the Oyo field, located in OML 120 in a transaction that closed in April 2010. Upon consummation of the transaction contemplated under the agreement, the company will have acquired Allied's full interest in the PSC (production sharing contract) and recombined the Oyo field within OML 120. The transaction is expected to close on or before November 30, 2010 and is subject to certain closing conditions.
Potential recoverable reserves in seismically defined prospects are estimated to be in excess of 100 million barrels. Identified crude oil reserves potentials for both OML 120 and the adjoining OML 121 are estimated at over 500 million bbls, with some exciting prospects having been identified in the deeper Miocene interval.
Byron A. Dunn, President and Chief Executive Officer of the Company, said, “The acquisition of the PSC contract rights with respect to the OML 120 and OML 121 blocks represents significant potential value for the Company. These contract rights extend under and well beyond the limits of the currently producing Oyo Field and are equivalent in size to 77 blocks in the Gulf of Mexico. These blocks are in a proven hydrocarbon complex, have stacked reservoirs, including the prolific regional producing Miocene trend, and are completely covered by four recently acquired high resolution 3D seismic surveys.
“In addition to production from Pliocene reservoirs, the OML 120 and OML 121 prospects have been identified in the Miocene trend. It is estimated that these Miocene prospects have over 500 million bbls of potential recoverable oil resources. Many of these prospects have been third party independently evaluated and confirmed.”